Only Disney attracts more visitors each year

People wishing to get up close and personal with the likes of President Barack Obama, Lewis Hamilton or Britney Spears may have visited one of eight Madame Tussauds around the world, one of this company’s popular brands. When it acquired the Tussauds Group for £1 billion in 2007, Merlin Entertainments became the world’s second-largest “visitor attraction” operator—only Disney is bigger. Last year, 35m people visited its 58 sites, which include four Legoland parks, 27 Sea Life attractions, three Legoland Discovery Centres and five Dungeons.

Merlin’s portfolio of British attractions includes the London Eye—which has won more than 80 awards—as well as the Alton Towers Resort, Chessington World of Adventures & Zoo, Warwick Castle, Thorpe Park and the London Dungeon. It also operates eight UK Sea Life attractions including the London Aquarium, and three Sea Life sanctuaries —rescuing and caring for sea creatures before returning them to the wild.

Merlin has ambitious growth plans, combining small strategic acquisitions, such as the London Aquarium, with strong organic growth and continuous investment in its core portfolio—an example is the £30m development plan recently announced for Legoland Windsor.

Roughly half of the company’s turnover comes from its overseas operations, a proportion that is set to rise. This year it will open Sea Life in Portugal, Madame Tussauds in Hollywood, and a Dungeon at Warwick Castle. A number of larger attractions, such as Legoland parks in Malaysia and Dubai, are also in the pipeline.

The company has its headquarters in Poole, Dorset, and is led by chief executive Nick Varney, who has overseen three buyouts since 1998. In 2005, Blackstone backed a £103m tertiary buyout from Hermes Private Equity, and then went on to fund the acquisition of the Tussauds Group from Dubai International Capital.

Merlin has achieved double-digit organic growth in ebitda (earnings before interest, tax, depreciation and amortisation) for the last eight years in a row; and the acquisition of Tussauds and Legoland—where like-for-like sales have doubled since 2005—has helped to fuel profit growth of 130% a year from £10.5m in 2004 to £127.4m in 2007.

Merlin is predicting that it will continue to grow, despite the economic downturn.

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